International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211

Volume 10, Issue 4, April-2022, Impact Factor: 7.429, Available online at: www.ijaresm.com

Indian Stock Market – A Distinction between NSE and

BSE
Vivek Kumar1, Vishal Kumar2, Vipin Pandey3
1,2,3
Galgotias University

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ABSTRACT

Stock Market is one of the most vibrant sectors in the financial system, marking an important contribution to
economic development. Stock Market is a place where buyers and sellers of securities can enter into transactions
to purchase and sell shares, bonds, debentures etc. Today long term investors are interested to invest in the
Stock market rather than invest anywhere. The Bombay Stock Exchange (BSE), the National Stock Exchange
(NSE) and the Calcutta Stock Exchange (CSE) are the three large stock exchanges of Indian Stock Market. The
entry of behavioural scientists in and around the 1980s brought in the market trading's human dimensions. The
stock market is an aggregation of investor sentiment that affects daily changes in stock prices. In other words
Stock Market is a plate form for trading various securities and derivatives. Nevertheless, the effects of investor
sentiment did not disappear and continued to intrigue market researchers. Though market sentiment plays a
significant role in timing investment decisions, classical finance models largely ignored the role of investor
sentiment in asset pricing.

INTRODUCTION

Stock market refers to the accumulation of markets and trades in which normal operations are performed of buying,
selling, and issuing shares of publicly owned companies takes place. Such financial transactions are performed through
formal trading with institutional or over-the-counter (OTC) markets operating under a set of defined rules. There is
have been many stock exchanges in the country or region that allow for stock trading and other types of securities.

NSE is India's leading stock market where one can buy / sell stocks publicly companies. It was founded in 1992 and is
based in Mumbai. The NSE has a fagship indicator called NIFTY50. The index contains the top 50 based companies its
trading volume and market capitalization. This index is widely used by investors in India and globally as a barometer of
India's largest oil markets.

The BSE is the first in Asia and the ancient stock exchange in India. It was founded in 1875 and is located in Mumbai.
It has a total of ~ 5,295 companies listed ~ 3,972 available for sale as of August 21, 2017. BSE Sensex is a BSE
flagship index.

The stock market is the best indicator of how well the economy is performing. Stock markets include all industries in
all sectors of the economy. This means that they work as a barometer for what cycle the economy is in and the hopes
and fears of the producers growth and wealth. The stock market is regulated where people can buy and sell shares of
different companies. Stock markets today are emerging as the most popular and a the best financial market tool for a
large number of investors. Large variety of stocks or stocks are available in the Indian stock market to cater for the
needs and expectations of all types of investors. Rapid growth in the number of mediators and the stock market
applications show a growing value for investment in the stock market.

Objectives of the research are:

 To Learning about emerging stock markets in India like NSE and BSE.
 To Learning about the annual results of the Indian stock market (BSE and NSE) from 2000 to 2020.
 Indian stock market analysis from 2000 to 2020.
 Assessing the risk and return of the Indian stock market (NSE and BSE) from 2000 to 2020.
 Learning about the type of trading preferred by investors in the stock market.

LITERATURE OF REVIEW

Kian –Pinhg Lim & Robert Brooks (2011) provides a systematic review of the weak‐form market efficiency literature
that examines return predictability from past price changes, with an exclusive focus on the stock markets. Our survey
shows that the bulk of the empiricalstudies examine whether the stock market under study is or is not weak‐form

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
Volume 10, Issue 4, April-2022, Impact Factor: 7.429, Available online at: www.ijaresm.com

efficient in the absolute sense, assuming that the level of market efficiency remains unchanged throughout the
estimation period.

AnjuBala (2013) evaluated that stock market is one of the most vibrant sectors in the financial system, marketing an
important contribution to economic development. Stock market is a place where buyers and sellers of securities can
enter into transaction to purchase and sell shares, bonds, debentures etc.

Ross Levine & Sara Zervos empirically evaluate the relationship between stock market development and long-term
growth. The data suggest that stock market development is positively associated with economic growth. Moreover,
instrumental variables procedures indicate a strong connection between the predetermined component of stock market
development and economic growth in the long run.

Samveg Patel is an Assistant Professor in S. K. Patel Institute of Management and Computer Studies, Gandhinagar. His
areas of interest include Financial Econometrics and Financial Management. His most recent publication was in IUP
Journal of Applied Finance.

AmanSrivastava (2010) evaluated that Stock market is an important segment of the financial system of any country as
it plays an important role in channelizing savings from deficit sector to surplus sector.

Charles K.D, Adjasi, Nicholas B. Biekpe (2006) studies the effect of stock market development on economic growth in
14 African countries in a dynamic panel data modelling setting. Results largely show a positive relationship between
stock market development and economic growth. Further analyses, based on the level of economic development and
stock market capitalization, are also conducted.

L.M.C.S. (2006) study investigates the effects of macroeconomic variables on stock prices in emerging Sri Lankan
stock market using monthly data for the period from September 1991 to December 2002. The multivariate regression
was run using eight macroeconomic variables for each individual stock.

Roman Horvath&DarganPetrovski (2012) examine the international stock market commovements between Western
Europe vis-à-vis Central (Czech Republic, Hungary and Poland) and South Eastern Europe (Croatia, Macedonia and
Serbia) using multivariate GARCH models in the period 2006–2011. Comparing these two groups, we find that the
degree of comovements is much higher for Central Europe.

Najeb M.H. Masoud (2013) tries to explore the causal link between stock market performance and economic growth in
terms of a simple theoretical and empirical literature framework.

Rafaqet Ali and Muhammad Afzal (2012) devastating global financial crisis started from United States, spread all over
the world and adversely affected real and financial sectors of developed as well as developing countries. This crisis is
called the first largest crisis after the recession of 1930s. The prime aim of this study is to envisage the impact of recent
global financial crisis on stock markets of Pakistan and India.

BACKGROUND

NSE EMERGE is a new NSE program for small and medium enterprises (SMEs) and start-up companies in India.
These companies can be listed on the NSE without initial public offering (IPO). This forum will help SME's & Start-
ups to connect with investors and assist them with fundraising. On 8 July 2015, SuchetaDalal wrote an article on
Financial Life alleging that some NSE employees were releasing sensitive data related to the most common trading or
local servers on a selected set of market participants so that they could trade faster than their competitors. The NSE
accuses blasphemy in the article on Money life. On 22 July 2015, the NSE filed a $ 1 billion (US $ 14 million) lawsuit
against Mali's health. However, on September 9, 2015, the Bombay Supreme Court dismissed the case and fined the
NSE ₹ 5 million (US $ 70,000) in a defamation suit against Money life (High Court asked the NSE to pay ₹ 150,000
(US $ 2,100) for each journalist DebashisBasu.

BSE Limited, formerly known as the Bombay Stock Exchange is an Indian government-owned stock exchange located
on Dalal Street in Mumbai. Founded in 1875, it is the oldest stock exchange in Asia. BSE is the 7th largest market in
the world with a market capitalization of more than US $ 2.8 trillion since February 2021. Although Bombay Stock
Exchange Limited is now similar to Dalal Street, this has not always been the case. In the 1850s, five merchants
gathered under a Banyan tree in front of Mumbai City Hall, where the Horniman Circle now stands. Ten years later,
merchants relocated to another leafy area, this time under banyan trees at the crossroads of Meadows and what was
then known as Esplanade Road, now Mahatma Gandhi Road. With the rapid growth in the number of buyers, they had
to change locations repeatedly. Finally, in 1874, the merchants acquired a permanent estate, a place they could call their
own.

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
Volume 10, Issue 4, April-2022, Impact Factor: 7.429, Available online at: www.ijaresm.com

METHODOLOGY

The purpose of this study was to analyze market capitalization, annual outcome and risk and significant stock market
return (NSE and BSE) for about 20 years from 2000 to 2020 and analyzing the investment pattern of traders in the
stock market. To check the purpose both primary and secondary data were used. Key data collected from 30
respondents using the google form. The second data was collected in various journals, articles, publications and online
websites.

The study was conducted primarily based on secondary data. As our study was in the middle During the covid-19
epidemic and lockdown, data collection has been reduced online sources. Many online sites provide adequate
information and data. Thus, there was a dependence on various sites. Lack of books and other material has been a major
limitation of our project.

RESULTS

Due to covid-19 pandemic, Sensex lost 3,934.72 points (13.15%) to 25, 981.24 and Nifty lost 1,135 points (12.98%) to
7610.25.

The biggest stock market crashes in India were caused mainly due to covid19 pandemic, 2008 financial crisis, Harshad
Mehta scam. Nifty has less risk and higher liquidity than Sensex. Nifty suffer lower market impact cost than Sensex.

Covid-19, strong correlation with the trends and indices of the global market as BSE Sensex and Nifty 50 fell by 38%.
The total market cap lost a staggering 27.3% from the start of the year.

Pre covid-19, market capitalisation on each major exchange in India was about $2.6 trillion. The Sensex returned
around 14% for the year 2019 prominently featured blue chip companies such as HDTV bank, TCS, Infosys, Reliance,
ICICI, without which Sensex return would have been negative. Despite a population of over 1.2 billon, there exist only
20 million active trading accounts in India.

The banking sector have maximum risk and return of 1.9 and 10 respectively ICICI in automobile sector Eicher motor
have maximum return of 35.9 Ashok Leyland have maximum risk of 1.9 IT sectors have maximum return of 17.7 and
maximum risk of Oracle of 6.6 and in fast moving consumer goods sector, Godrej have maximum return of 14.8 and
highest risk in ITC of 0.5.

The stock of bank of India, HDTV bank, Mahindra bank are less volatile in nature. The stock of federal bank, Indus
land bank, Canara bank, ICICI bank, PNB, SEBI are moderately volatile in nature. The stock of yes bank and axis Bank
have high volatile in nature.

Among all the investment avenues in the stock market banking is considered as the most sensitive investment avenue
the fine stocks of banking sectors shows Arch effect which means period of high vitality is followed by similar high
volatility and low is followed by low volatility.

The S&P 500 experienced it’s fastest ever bear market, clocking in at just 33 days before it’s third fastest recovery to a
break-even level in about 5 months.

80% of the stockholders invest/trade in stock market for higher return rather than safety and liquidity. 50% of the
stockholders got information regarding stock market from financial advisors or brokers. 63% of the stockholders prefer
to have long term trading as it involves less risk. Intraday trading has higher risk thus only 7% preferred intraday
trading.

All the stockholders prefer to have online mode of trading. As the advancement of technology and the pandemic
scenario have made stock market into an online node of trading.

CONCLUSION

The Indian stock market has now grown into an excellent product with a lot of quality input and an emphasis on
investor protection and disclosure procedures. The market has become automated, transparent and self-driving. It is
integrated with global markets, with Indian companies seeking to be listed on foreign exchange markets, offshore
investments coming to India and foreign exchange floating in their systems and thus bringing technology to our
markets. India has found the difference in having a large number of investors near the U.K., perhaps our country will
have a large number of listed companies with several channels to manage equity fund and National Treasury managers
most of them self-employed. India now has a world-class regulatory system in place. Thus, at the beginning of the new
millennium, the equity financial market boosted the wealth of Indian companies and investors. There is no doubt that

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
Volume 10, Issue 4, April-2022, Impact Factor: 7.429, Available online at: www.ijaresm.com

strong economic stability, demand growth, market structure development, and other factors have been the driving force
behind it. Although the Covid epidemic has subsided in the Indian stock market, it has also recovered with the sharp
rise and stability of the country's economy.

REFERENCES

BOOKS/JOUNALS

[1]. Anjubalan (2013), Indian stock market- review of literature, TRANS Asian journal of marketing and
management research.
[2]. AvijanDatta, gauthambandopadhyay, prediction of stock performance in the Indian stock market using logistic
regression, international journal of business and information.
[3]. Gangan deep sharma&B. S Bodla, Inter linkages among stock market of south Asia, Asia Pacific journal of
business administration
[4]. Peter sellin, monetary policy and stock market: theory and empirical evidence sverigesriskbank working paper
series.
[5]. Alokkumar Mishra, stock market and foreign exchange market in india: are they related? South Asia economic
journal
[6]. Mara madalino&carlopinho, time frequency effects on market indices: world commovementsparis, 2009 finance
international meeting AFFI -EUROFIDAI
[7]. Vivek rajput&sarikabobde, stock market predictions using hybrid approach, international journal of computer
science and mobile computing.
[8]. Vanitatripathi&shruthisethi, integration of Indian stock market with world stock markets, Asian journal of
business and accounting.
[9]. Marcia olisigao, effects of temperature on stock market indices: a study on BSE & NSE in India, international
journal of economic research.

WEBSITES:

[1]. www.nseindia.com
[2]. www.bseindia.com
[3]. www.businessinsider.in

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